The jobs report on Friday was disturbing. Even the business press is uneasy.
The unemployment rate fell to 6.7% from 7.0%. But there was no decline at all in the broadest measure of unemployment, known as U-6, which includes millions of folks who work part-time but are seeking full-time jobs. In proportionate terms, the gap between U-6 and the official rate of unemployment is the widest since the Bureau of Labor Statistics began tracking U-6 in 1994. That is disconcerting.The Financial Times puts it more bluntly in its assessment of what it called a "perverse" jobs report:
New year hopes for an accelerating recovery in the US in 2014 were punctured on Friday after December saw the slowest pace of growth in new jobs for three years.Even what are usually bone-dry statistics have taken on a strange hue of urgency as economists try to understand what on earth is happening to the American labor force.
In December, against a civilian working-age population count of 246.7 million, the labor force came to 154.9 million, for a participation rate of 62.8% -- a 35-year low. In December 2012, the rate stood at 63.6%. And against the population count of 246.7 million, the 0.8 of a percentage-point decline means that nearly 2 million workers are among the missing."Among the missing" sounds like a phrase you'd expect to hear after a plane crash or building collapse. Everyone seems to have a different idea where those workers went.
The Barrons article, linked above, darkly hints that many are among those swelling the Federal disability insurance rolls, the implication being, perhaps that they should be hunted down and accosted for continuing to survive on the taxpayer's dime (to what end, it isn't clear).
The Atlantic calls Friday's numbers he "weirdest job report ever," tries and fails to find some kind of silver lining (pointing unconvincingly to the drop in health care costs), but arrives at the same basic conclusion--despite the fact that half of the declining labor participation rate is due to retiring baby boomers, well, they weren't supposed to be retiring so soon.
Demographers anticipated the boomers getting older, but they didn't expect participation to fall off a cliff like it has.... Given the bleak opportunities in the economy, some men and women have decided to do other things—and those things have mostly involved not working.There's a chart in the Atlantic article that shows the steep drop-off in labor participation compared to what the BLS predicted for this period of time. The Atlantic calls it "stark." That's an understatement.
The remainder of the shortfall is made up of young males age 18-24 who have no jobs to find (the poor kids) and the ones who are desperately staving off the inevitable by attending college and grad school (the rich kids). Either way, there is no suggestion that any great influx of worthwhile jobs is looming on the horizon.
This lack of jobs is the product of many converging factors, but is in part due to the inadequacy of the original economic stimulus and the fact that the President's attempts to develop jobs through infrastructure, energy and other initiatives and incentives have been largely thwarted by the Republicans. As they are ideologically opposed to any Keynesian Economics-based market theory which may have proved successful in the past, the GOP has not and will not support such attempts to create new jobs, or attempts to create the environment where meaningful, longterm jobs can exist. We're seeing the results of that bit of economic malfeasance now.
According to the Wall Street Journal, the corporate tax rate is now the lowest it has been in 40 years. According to the Department of the Treasury, the budget deficit is now the lowest in five years. But the constant refrain from the Republicans is that further corporate tax cuts and reduction of government spending to reduce budget deficits will miraculously lead to job creation. Since the stimulus, which even many Republicans admit created jobs and pulled us back from the fiscal brink, the House Republicans have controlled the purse strings in Washington. Spending on jobs programs and anything else is wholly dependent on their whims. If their philosophy had any validity we would have seen the effects by now. Instead, what we see is continued stagnation on the jobs front and increased desperation and fear for their future among the American people.
The New York Times' front page today suggests that the week's dismal news about Americans leaving the workforce will help Democrats make their case for the extension of unemployment benefits. At the same time, the article suggests that the bad news will also hurt Democratic chances in the 2014 election. But this analysis is self-contradictory. If the GOP were to agree to extension of unemployment benefits they'd be helping the economy, which by the Times' own logic would help Democratic prospects in 2014 as they could point to an improving economy. The New York Times may not realize the obvious but the GOP does--any economic uptick in this country is to their disadvantage. This includes any positive change in the employment picture. In fact, the Times article notes that House Republicans are pointing to the fact that some jobs were created in order to justify withholding an extension on unemployment. In other words, they're looking for any excuse--no matter how weak or vapid--not to help the unemployed. Why? Because the economic benefits to providing unemployment assistance, assistance which is invariably poured directly back into the economy, are well-established. Provide unemployment benefits and you improve the economy. Improve the economy and you help the Party perceived by the public to be "in power." Even though the Republicans control the appropriations process, effectively holding a veto over most Federal spending, the voting public will look to the Party that holds the Presidency as responsible for their economic situation.
Brian Beutler writing for Salon concludes that that there is more at work in the GOP's stance against extending aid to the unemployed than simple fealty to conservative principles. He examines all of the GOP's easily-disproved arguments--that continued unemployment aid fosters dependency, that it can't be paid for, that the deficit is too high--and finds them unusually hollow in this circumstance, an era of economic fragility following on the heels of the greatest economic crisis in 75 years. So hollow in fact that he concludes there is something else motivating the Republicans:
I question the extent to which the hollowness on display here is born of genuine unconcern. It might be easy for some Republicans to blind themselves to the employment crisis, but plenty of others are confronted with it constantly.One of those so confronted is the Senate Minority leader Mitch McConnell, whose state of Kentucky is experiencing, in his own words, a Depression in its Appalachian region. If the cause of such drastic unemployment were really too much government largesse, regulation or interference then those "problems" are not going anywhere until Obama is out of office, presumably replaced by a Republican Executive. But that line of thinking provides no justification for McConnell's current refusal to extend benefits to his own state's population. The same is true of Rand Paul, and all of the other Republican Senators from high-unemployment states who have come out against extending benefits.
By process of elimination, we’re left with politics. Unemployment benefits make people’s lives better and buoy a fragile, but possibly accelerating recovery. Some Republicans are apparently reluctant to give the economy, and by extension the Democrats, a shot in the arm right now.Beutler is right--it has been the Republican motif for the last five years, and no one has called them on it. The American people deserve to know who is responsible for holding the economy back, particularly at this critical time when the Recovery thus far has benefitted some, but not even close to all Americans. It's long past time for the Democrats to call out the Republican policy for what it is and has been for the last five years--deliberate economic sabotage.
This has been the motif of the past five years.